Heritage Bank, PWC, Deloitte seek tech adoption in tackling fraud, COVID-19
• Cost of cybercrimes hit $42 billion
• Banks recorded 25,029 cases of fraud, lost N2.21b in 2018
Heritage Bank Plc has called on internal auditors of banks to adopt the various digital technologies to tackle fraud and annul the adverse impact of the ongoing COVID-19 pandemic on the financial ecosystem.
Speaking at the 47th Quarterly Meeting of the Association of Chief Audit Executives of Banks in Nigeria (ACAEBIN), Managing
Director/Chief Executive Officer, Heritage Bank, Ifie Sekibo, said for improved banking operations and safer financial system for stakeholders, internal auditors must be dynamic and quick to adopt various digital measures.
He said a recent analysis from the PricewaterhouseCoopers’ (PWC’s) Global Economic Crime and Fraud Survey 2020, showed an alarming impact of fraudulent activities in the banking sector.
According to the report, cash taken straight off companies’ bottom line through cybercrimes hit an eye-watering $42 billion, whilst 13 per cent of those who had experienced fraud said they had lost over $50 million.
Sekibo, who spoke on the theme, “Elevating Internal Audit’s Role in the Face of Emerging Risks and Opportunities,” hosted virtually by the bank, said while it was sufficient for auditors to understand regular and routine banking practices, they must become versed in cybersecurity, artificial intelligence, data analytics, and fraud management among others.
According to him, this would help auditors in presenting balanced, objective audit reports to Executive Management, while striking the right balance between the assurances and consulting responsibilities.
In her keynote address, Partner Risk Advisory at Deloitte, Ibukun Beecroft, said although Nigeria’s banking industry has adopted various digital measures to keep businesses running, there was need to position Internal Audit (IA) to provide the required services in the face of the changes and attendant risk, particularly increased cyber-risks.
She said according to the 2018 Financial Stability Report by the Central Bank of Nigeria (CBN), banks recorded 25,029 confirmed cases of fraud, which resulted in a loss of N2.21 billion, noting that over 90 per cent of the fraud cases in 2018 were perpetrated via technologically driven channels.
According to her, internal auditors should reprioritise the audit plan as soon as possible to provide assurance over the most consequential risks while being cognisant of the impact on operations.
She said: “As Internal Auditors, the knowledge of technology would enable us to identify gaps in our core banking applications and other applications and provide relevant recommendations to eliminate loopholes that may serve as an avenue for potential fraud.
“To take advantage of these changes and disruptions, auditors need to rethink their role by adapting to and embracing change, enabling the IA function to become more agile, nimble, and forward-looking, thus driving change through the 3LOD.”
Beecroft stressed the need for auditors to focus on advanced technologies and risk management operations as reflected around the
Three Lines of Defence (3LOD) churned out by the Institute of Internal Auditors, which would create opportunities for IA and its future role.
She warned that the ever-changing landscape and evolving risks in the banking industry could render the current internal audit plan obsolete.
Commenting, Director Internal Audit Services, PWC, Yetunde Oladeji, reiterated the need for the banking sector to be dynamic, and prioritise digitisation and flexible workforce strategies as they would determine the industry’s ability to adapt to the rapidly changing circumstances to survive and thrive.